America’s Chief Information Officers’ outlook toward business conditions has taken a significant decline this month. CIOs are echoing the concerns of their CEOs, signaling hesitancy due to uncertainty over Covid-19, the political landscape and the increasingly tight employee market. They are still, however, more optimistic than many of their peers in the C-Suite, encouraged by rising attention to and investments in cybersecurity and digitalization.
That’s the September briefing from StrategicCIO360’s new CIO Confidence Index poll, part of an ongoing effort by Chief Executive Group to measure the outlook, challenges, priorities and areas of focus of public-company directors, CEOs, CFOs, CHROs—and now CIOs. In our September survey—of 89 CIOs, conducted the week of September 13—43 percent say they expect business conditions to improve over the next 12 months, rating them a 7.3 out of 10, or “very good,” according to our 10-point scale. That’s only 3 percent higher than CIOs’ rating of current conditions—at 7/10 and up 4 percent since last month.
This rating of 7.3 is down 2 percent this month but is nonetheless among the highest of the C-Suite—surpassed only by CHROs’ 7.8, according to our CHRO Confidence Index conducted last month.
Polled CIOs believe that the worst of the pandemic is behind us as demand has been increasing since vaccination efforts began earlier this year. Their optimism is further fueled by increased attention and investments paid to cybersecurity and digitalization. Rising adaptability and comfort with remote work are also reasons for their “very good” rating of both current and future conditions.
This month, only 43 percent of CIOs are forecasting improvements in the year ahead—down 27 percent from last month when 59 percent of them predicted improvement. This is counter to CEOs, where the proportion predicting improvements to business conditions 12 months from now grew by 18 percent between August and September.
A majority of CIOs are still concerned that the remote work environment increases the risk of cyberattack and worried that because it has become more difficult to find skilled IT professionals, their companies are open to threats and business conditions are worsened overall.
“Recruitment of qualified employees continues to be very difficult given the low salaries we are able to pay compared to such businesses as Amazon and fast food chains that can offer $15 starting wages with no skillset,” says Steve Adamczyck, CIO at a nonprofit in Michigan. Nonetheless, he expects business conditions to improve as the nation overcomes the pandemic.
Bill Nixon, CIO and Director of Technology and Innovation with the Johnson County Kansas Government, says, “Continued political division across the U.S. is driving inaction around vaccination rates, employment, and spending/savings. Lack of vaccination or other health measures will keep us in a ‘limbo’ state that will financially impact consumers, businesses, and governments as consumer spending remains low, commercial real estate remains empty, unemployment remains high yet job opportunities, which few want, go unfilled.” He believes conditions will fall below 7/10 to 6/10 in the next 12 months.
The Year Ahead
CIOs are significantly more conservative in their outlook for the bottom line—that is, profits and revenues. Only 58 percent of CIOs forecast increases in profits over the next 12 months, down 12 percent since last month and 15 percent lower than the proportion of CEOs who forecast the same (68 percent). Predictions for increases in revenue are also down this month, at 75 percent, 9 percent less than last month (82 percent).
“I am concerned that political actions may drain profits and force retrenchment. Higher taxes will drain capital and force workforce reductions,” says Gerald Edwards, CISO at The Sourcing Group, a consumer manufacturing company.
The proportion of CIOs predicting increased investments in both technology and cybersecurity has declined in line with their prediction of revenues, each down 10 percent from the month prior. Despite common sentiment that hiring remains difficult, 58 percent of CIOs predict IT staffing will increase over the next year, up 6 percent since last month, speaking to the ever-increasing importance of IT staff at companies across industries.
In the words of the CIO of a healthcare company: “There will be more users and more data to manage.”
About the CIO Confidence Index
The CIO Confidence Index is a new monthly pulse survey of CIOs and technology chiefs on their perspective of how current events are affecting their companies and strategies. Every month, StrategicCIO360 surveys hundreds of CIOs across America, at organizations of all types and sizes, to compile our CIO Confidence Index data. The Index tracks confidence in current and future business environments, as well as their forecast for their company’s revenue, profit, cyber and tech investments, and IT staffing for the year ahead. Learn more at StrategicCIO360.com/CIO-Confidence-Index